Bradley Forced to Turn Over Tax Records to U.S. Attorney

Mayor Tom Bradley has turned over his income tax returns to the U.S. attorney’s office in connection with an expanding federal investigation of the mayor’s personal business dealings and his conduct in public office, The Times learned Monday.

Citing his rights to privacy, Bradley had refused a request from City Atty. James K. Hahn to release his tax records during the six-month city probe, which found insufficient evidence to prosecute the mayor on conflict-of-interest charges.

The U.S. attorney’s office demanded Bradley’s tax returns as part of the wide-ranging criminal investigation of the mayor, which now includes a federal grand jury, said a source familiar with the probe.

On Monday, Bradley downplayed the significance of the grand jury investigation.

“There’s nothing new in this whole thing,” Bradley said.

In his first public statement since it was disclosed last week that his case was being taken to a federal grand jury, Bradley told reporters the federal investigators “appear to be interested in my investments. . . . Whatever they want. We are going to cooperate.”

Bradley declined to specify the documents that were subpoenaed from his office on Sept. 11 by the grand jury or whether federal authorities sought his tax forms. The mayor’s spokesman, Bill Chandler, said late Monday the mayor would have no further comment.

Federal agents, working through a grand jury, have more investigative tools at their disposal than the city attorney. The federal grand jury, unlike Hahn, can compel witnesses to testify under oath and subpoena virtually any records.

However, Bradley portrayed the grand jury involvement as a logical procedural step in the federal investigation.

“The government has to have the authority to issue a subpoena,” Bradley said. “They get that authority from the grand jury, which was already sitting. It is, in my judgment, no problem.”

The grand jury has issued at least five subpoenas related to its investigation of the mayor.

On Monday, Columbia Savings & Loan Assn. confirmed that a grand jury subpoena was received on Sept. 11 related to Bradley. Columbia spokeswoman Lenore Hatch refused to discuss whether the subpoena was directed to Columbia or any individuals at the firm. The founder and vice chairman of Columbia, Abraham Spiegel, has a long and close relationship with Bradley.

Others who received subpoenas include the city treasurer’s office; Ira Distenfield, a prominent Bradley fund-raiser and former Harbor Commission president who served as the mayor’s stockbroker; and Bateman Eichler, Hill Richards Inc., a West Coast brokerage firm that employed Distenfield.

A spokesman for Drexel Burnham Lambert Inc., the controversial Beverly Hills investment firm that arranged securities, including junk bonds, for Bradley, declined to confirm whether it has received a subpoena.

Times staff writer Frank Clifford contributed to this article.